Monday, October 2, 2000
All was well in biotech last week, even as the tech-heavy NASDAQ
Composite shed 3 percent. The BioCentury 100 traded up 2 percent, while $856.3
million was raised in six underwritten deals that included a quartet of IPOs
and two follow-ons. Perhaps more importantly, all the financings brought in
more than they had originally hoped: both follow-ons jacked up their deal size
and priced considerably higher than their price at filing. In the IPO group,
two deals were bumped up in size, with one pricing at the top end of the range
and the other pricing $1 above the top end; the other two deals priced at the
top end of their ranges (see "Makin' Money").
The follow-ons were highlighted by Protein Design Labs' $355.3
million deal, in which the antibody company sold 3 million shares at $118.438.
PDLI added 500,000 shares after it saw its price rise $20 (31 percent) on the
road. Cancer play NeoPharm (NEOL) added 200,000 shares to its follow-on and
ended up raising $106.5 million through the sale of 3 million shares at $35.50.
NEOL's price nearly doubled from its filing price of $19.375.
Secondary demand remained strong as well. All six of the deals
traded up over the week. Indeed, two of the IPOs - ag bio play Eden (EDEN) and
protein chip developer Ciphergen (CIPH) - at least doubled.
Sensing the strong demand, five companies (four follow-ons
and one IPO) rushed to file for $1.5 billion of offerings. The most ambitious
is Millennium (MLNM), which would carve out $863.4 million if it sold its 5.5
million offered shares at its price prior to filing of $156.984. Other follow-ons
include cancer and infectious disease discovery play OSI Pharmaceuticals (OSIP,
$316.7 million); cardiovascular play Corvas (CVAS, $112.5 million); and metabolic
play Insmed (INSM, $70.6 million).
Meanwhile, Adolor is resurrecting its 6 million-share IPO,
which it postponed in April. The company, which is developing drugs for neurological
disorders and pain management, even pushed up its price range to $15-17 from
With the IPO and follow-on markets sizzling, private companies
are hurrying to put their ducks in order by adding cash and blue chip investors
in mezzanine rounds. Eos, a genomics, bioinformatics and drug discovery company,
raised $27.5 million in a mezzanine round that included investments from two
banking firms: U.S. Bancorp Piper Jaffray; and Roberston Stephens. And FibroGen,
which has developed a method to produce human collagen and gelatin in recombinant
systems, raised $56.5 million in a venture financing led by Franklin Templeton
Investments and American Express Financial Advisors.